Lease an SLT for <600/mth

[humer101]

I get to beat up a car for 2 or 3 years and I really don't care what happens to it***

OK lol now we talked

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[Pockets]

[emoji115] [emoji115] [emoji115] haha.... lights and sirens to the next cat!

 

[twhitechurch]

Hahaha

 

[Grimes]

So it does seem like you can't long-term lease (as in, your whole life) unless you have an aggressive revenue, not so much standing cash. Throw in the mileage limits and you have further restrictions.

Let's go off of some fake numbers, working with an MSRP of 50k. I would rather (and do believe it is more reasonable) to put 10k down on that vehicle and pay interest on a payment that lasts 4 years until the loan is up. At that point, I've paid a little over 50k, it is 2018, the truck is mine, and is still worth something (lets say 25k, I don't drive much). If I leased, I have nothing but less investments due to the money that I no longer have from leasing. From this point, lets say I sell for 25k. Now I'm 25k above those who leased, and could put that down on a new vehicle. Or, I could hold that vehicle for 4 more years. Lets say things hit the fan and everything goes wrong and I do a full powertrain overhaul, and end up putting 20k into the truck. In 2022 I still have a fully functional vehicle because I dropped money instantly on good maintenance and repairs as needed or for prevention, and I am now 55k up on leasers (because they did another 50k on a truck, that is never theirs).

As I said originally, I see no benefit (and really only deficit) when someone leases without having a very aggressive investment in place. That said, "not having the money" is not an excuse to lease a vehicle long term (all of my points here are based off of being settled in one area with a stable life and the intent to own vehicles with a smile on your face). You would have to have that 50k (probably more) invested elsewhere, again, very aggressively.

All of that said, and I do not personally condone this, it is STILL more beneficial to purchase the vehicle (even with a reasonable loan) and then sell it while it is still hot.

I believe that the least expensive way to own a vehicle is to drive it to the dirt every time. 300k miles, 15 years, whatever it takes. The only reason to trade up/sideways is for stress mitigation and simply the want for something else/something new (which is perfectly acceptable, and is outside this economical discussion).

My dad purchased the 2003 GMC Yukon SLT I drive today new back then for 43k I believe. He gifted it to me in 2009 or 2010 with about 190k on it and in perfect condition save for some leather wear. Well maintained, only 2 minor collisions, no non-maintenance powertrain work. To date, I have 210k on it, one minor collision that needed no repair or even body work (thank you grille guard, another good investment), and I will say maybe 10k over the last few years in repairs AND modifications. Since 2003 the owner of this vehicle has kept it in excellent condition, in reason, (I will say, save for the roof) and has been no where near to costing the MSRP in work/repair. So over 12 years, in which in my previous examples would involve $150,000 worth of new vehicles including the original, this 2003 has set me at somewhere between 60 and 70k. And it is still worth over $5,000, so that can be deducted. Has it been stressful at times? Sure. But that stress saves me a few years of salary down the road, for true investment. If you have the money to pay for that stress mitigation, hell, I'd do it too (within reason; money can buy happiness, give me some and watch). I am just pointing out that for the sake of paper finances, leasing does not appear to be safe or effective in the long run.

 

[twhitechurch]

I get your point, but if from the get go you have the intentions of having a new vehicle every 2 or 2 years then it does make sense.

 

[Grimes]

I get your point, but if from the get go you have the intentions of having a new vehicle every 2 or 2 years then it does make sense.

Again using my 12 year span and 50k MSRP and 25k resell values, leaving factors like interest out. Hell, buy it for cash, and my point still stands.

Method 1:
(($50,000 MSRP)(12 years total/3 years per)) - (($25,000 resell)(12 years total/3 years per)) = (50,000)(4) - (25,000)(4) = $100,000 deficit from the beginning of the 12 years, with all 4 cars bought and sold.

Method 2:
($50,000 MSRP)(12 years total/12 years per) + $20,000 maintenance - $5,000 = (50,000)(1) + 20,000 - 5,000 = $65,000 deficit from the beginning of the 12 years, with 1 car bought and maintained, then sold.

Yes, the numbers are arbitrary, but it clearly does NOT make sense to buy new vehicles (let alone lease) so often. Unless you take money that is otherwise allocated to hobbies and stress mitigation, at extreme amounts (which again isn't part of this calculation), it is simply not an effective way to spend money.

 

[07Burb]

Again using my 12 year span and 50k MSRP and 25k resell values, leaving factors like interest out. Hell, buy it for cash, and my point still stands.

Method 1:
(($50,000 MSRP)(12 years total/3 years per)) - (($25,000 resell)(12 years total/3 years per)) = (50,000)(4) - (25,000)(4) = $100,000 deficit from the beginning of the 12 years, with all 4 cars bought and sold.

Method 2:
($50,000 MSRP)(12 years total/12 years per) + $20,000 maintenance - $5,000 = (50,000)(1) + 20,000 - 5,000 = $65,000 deficit from the beginning of the 12 years, with 1 car bought and maintained, then sold.

Yes, the numbers are arbitrary, but it clearly does NOT make sense to buy new vehicles (let alone lease) so often. Unless you take money that is otherwise allocated to hobbies and stress mitigation, at extreme amounts (which again isn't part of this calculation), it is simply not an effective way to spend money.

I'm getting in on the tail end of this convo but I'll put my 2 cents in because I like to hear myself type words to a screen

Up front, I'll tell you I don't buy brand new vehicles anymore just because I don't like taking the steep depreciation hit. It also helps that I personally like older vehicles which is why I DD a '98. My wife DD's our 07 Burb. When we got it it was already 3 years old and what we bought it for 4 years ago is what they are still selling at today so we got a screaming deal! We could afford to drive much newer with lower miles but choose not to for our own reasons.

Anyhoot, I say all that to say your statement of "it is simply not an effective way to spend money" when referring to how people buy/lease their vehicles does not hold water because everybody's situation is different. Maybe it doesn't "make sense" to you to buy or lease a new car every 2 or 3 years but it may make perfect sense to someone else. For instance, my aunt and uncle lease both of their vehicles and have for 20 years. This makes sense to them because they literally put maybe 8k per year on their vehicles and with that they get maintenance free cars because all work is handled without question. This aunt and uncle also live a pretty conservative but yet very profitable life so who's to tell them that leasing a vehicle "doesn't make sense"? They've certainly got the track record to prove otherwise. Then on the other side I have another side of the family who buys brand new cars every 2 to 3 years with cash and not cheapo Toyota Corollas. Again, who's going to tell them "it doesn't make sense" when obviously they've done well for themselves. Even if they were to make payments on these vehicles at the offered 0% interest it doesn't matter because it's the same thing.

I say all this to say formulas and all that BS don't prove a thing. It's different for each household and "make sense" for them. Some households it's foolish for them to buy even a $5k car every 8 years but others don't flish at $50k car every year. No two households are an apples to apples comparison so there's no point to even have the debate IMO

...off soap box

 

[Grimes]

I suppose my point is more to the light of the excess money put into leased and constant new vehicles could be better put to use, say, in an appreciating investment. I totally understand that all cases will be different, as I mentioned stress mitigation and the simple fact that people (like on this forum) have hobbies that ARE their vehicle. You, for example. But do you put $8,000 towards your vehicle every single year? Sure to pay off a loan on a new vehicle, but we get that. Do you dump $8,000 on repairs, and even mods, on your vehicle annually? I would hope not. Some may make that big trigger pull, but lets just distribute that to the other years of minimal costs due to that one big purchase.

But yes, I see your point that I am arguing about culture more so than what I originally intended. It is just hard to see money thrown around, and out, with this kind of stuff.

 

[twhitechurch]

Grimes I get your point, I do. But my utility comes from the easiness and convenience of jumping into a new lease. Hopefully in the future I hope to start having a fun car which I will purchase in cash used and slowly escalate that fun car. But for my daily driver I'd rather "set it and forget it". Are taxis cheaper than Uber? Yea for the most part, but the fact that I can click a button and a limo shows up which I don't have to deal with cash with is a huge advantage for me. To sum up I don't mind paying a bit more If it can just be dealt with and over with quickly.

 

[humer101]

I suppose my point is more to the light of the excess money put into leased and constant new vehicles could be better put to use, say, in an appreciating investment. I totally understand that all cases will be different, as I mentioned stress mitigation and the simple fact that people (like on this forum) have hobbies that ARE their vehicle. You, for example. But do you put $8,000 towards your vehicle every single year? Sure to pay off a loan on a new vehicle, but we get that. Do you dump $8,000 on repairs, and even mods, on your vehicle annually? I would hope not. Some may make that big trigger pull, but lets just distribute that to the other years of minimal costs due to that one big purchase.

But yes, I see your point that I am arguing about culture more so than what I originally intended. It is just hard to see money thrown around, and out, with this kind of stuff.

Agree 100% this societies base and a lot competition and who can pull More or have better them others.
Some people do investment because necessity or have not choice.
If you look around or next to you you will understand my point, is crazy.
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